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Of further interest in the pathfinder, I would point out there's substantial and exciting new information about the progress Microsalt has made. See page 26 - sales: (I don't know why Zeus refer to Microsalt as "Crystal" but that's what they do)
"Customer A (Agri-> very likely to be CVS Pharmacy)
Customer A has identified numerous of its private label products which they are keen to substitute traditional
salt with [Crystal]. The initial product rollout relates to four nut SKUs in approximately 800 stores in the US.
The Group has commenced production of [Crystal] to be supplied for these private label products, with
finished products expected to be on Customer A’s shelves in September 2023. Furthermore, it is expected
that Customer A will sell [Crystal] shakers alongside products on end of shelf space from quarter one of
2024. The Directors expect both the SaltMe! Crisps and the shakers to be further rolled out across a
significant number of Customer A’s 9,000 store estate in 2024.
Customer B and Customer C (Agri-> I believe this is Pepsi who operate extensively in LatAm)
Although separate entities, Customer B and Customer C operate under the same group and form one of
the largest food, soft drink and snack manufacturers in the world. Following the achievement of global
approved vendor status in November 2022, the Group recently advanced its commercial relationship with
Customer B with the delivery of an initial 9.5 mT purchase order. Continuing monthly orders of 9.5 mT are
expected, with a supporting purchasing agreement anticipated before the end of 2023. Further line additions
are then expected to follow in the first half of 2024 across multiple leading brands of Customer C.
Discussions are progressing across several other geographical markets and the Group is currently
negotiating a purchasing agreement for the Mexican and Latin American Markets. At the same time,
discussions are ongoing relative to North American and global expansion. The Company is also negotiating
a JDA to facilitate the coordination of additional product innovation and development opportunities in quarter
one of 2024.
Customer D
The Group has been accelerated through Customer D’s R&D channels following positive sample and
production results. [Crystal] has been confirmed for use in a rolled corn tortilla snack and an initial purchase
order is expected by management in mid-2024. At such time, management expect that Customer D will
release a joint press release citing [Crystal] as a key pillar of their low sodium solution(s).
Customer E
The Group is currently in the planning stage with Customer E, with samples of [Crystal] being sent for testing
across several frozen food items in April 2023. Customer E already has an active low sodium initiative and
initial orders are expected in April 2024.
If you dig into the PrimaryBid documents as I have there is no definitive pricing or valuation.
I've read $25m and $4.5m as valuations this morning from various contributors.
Let's try to apply a bit science rather than randomly plucked numbers.
I would remind people of a couple of basic facts.
The internal valuation is $17,624,102 as at 30/6/23 and TEK owns 97% of Ltd valued at $17,095,379.
Ltd owns 79% of the LLC valuing the US Business at $22,308,989.
It is the LTD which is being IPO'd. It is a hold co.
It is the LLC where all sales and operations occur.
Meanwhile the IPO speaks of raising £10m-£15m of funds. That equates to $12.2m and $18.3m.
"Usually" an IPO will be at or above the NAV.
"Usually" TEK likes to retain an interest (Skin in the game). Let's assume same as BELL, TEK wants to retain 15% post IPO
I say usually in that nothing has yet been decided.
That means $17.1m x 85% = $14.5m worth of shares where the "aim" is to float at a 26% premium to NAV. (to receive $18.3m). But they will be prepared to go down to a 15.8% discount to NAV. (to receive $12.2m)
What does that mean for TEKkies? Well, at the top end valuation each shareholder gains 2p a share. (7.6p/tek share to 9.6p/tek share).
At the bottom end each TEKky loses 1.2p a share. But that's a loss from the NAV.
Anyone following my recent post (https://theoakbloke.substack.com/p/tek-h1-2023-is-cliff-doing-a-cliff) will realise that it leads to the proportion of LISTED holdings, backing up the value of each TEK share.
GLA
Https://open.substack.com/pub/theoakbloke/p/shall-we-sup-or-get-smoked-out
No negative surprises - really solid results.
Of particular note, was not only are BP an investor into WasteFuel but also are providing:
"....a technical collaboration to improve bio-methanol production efficiency, yields and economics. As part of this agreement, the business will be able to leverage bp's proprietary technology to help optimise and improve its low-carbon, bio-methanol production."
Https://open.substack.com/pub/theoakbloke/p/venture-life-group
Reading Canacord Genuity’s broker note the market appears to have amnesia combined with a heavy fall from the stupid tree.
Both the Conmet and Propel products are either fully commercialised or responsibility is now with the partner. Assuming both revenue streams are “gone” is simply wrong.
The non-cash write downs of intangibles is due to accountancy rules - and it’s a big difference to writing off because that IP is now valueless or obsolete…. Nothing could be further from the truth.
I’ll be writing more about this soon together with my forecasts.
Gla
Danda, when 1 of 2 things happen:
1a. Demonstration of EBITDA profitability - so that will be in a trading update in Jan/Feb possibly March '24.
1b. The second demonstration is this is also forecast to turn cash generative in 2024. Once that is reported in Q3 2024 there will be a further marked change.
3. When the "Growth is Bad" mantra* ends.
* - Growth isn't bad. Growth means revenue growth which leads to profitability growth. Growth is essential. But right now if your business model is growth - then you're bad.
The new CEO sounds a great addition to the team, while Tony remains involved too as non Exec. Very positive development in my opinion.
Kentio - try watching this video about Volta. I was very impressed with Serge Demay:
https://hardmanandco.com/hardman-talks-volta-finance-webinar-seizing-opportunities-volatile-times/
The yield on Volta is lower than Fair and the spread larger, but I did like how Serge presented, so hold a small amount of Volta but mainly hold FAIR.
Fascinating:
https://www.youtube.com/watch?v=Q38z_VoGtEY
A dude compares: 1/ Amazon Echo Frames, 2/ Ray-Ban Stories, 3/ Lucyd Stratus, 4/ Razer Anzu, 5/ Ampere Dusk and 6/ Bose Frames Tempo glasses
What Lucyd does (uniquely):
> Widest range of style and Lens
> Chap GPT
Vs: What the competition can do:
> Built-in Cameras
> Carry cases with charging facilities in the case
> Swappable lenses
> Auto volume (changes the volume according to ambient noise)
> Change the tint through the app
> Find my glasses alarm through the app
> Alexa
Who wins?
How do the 6 compare.
I'll give you a clue. The winner is a pair of glasses that the Terminator would take from a biker (along with his keys and clothes).
Watch the video!
Damofarl,
Fair is number 1 in September's IC's Alpha Investment Trust List of 25 with a Z score of 3.1 but out of their top 25 as usual they hone in on a "top 10" which begins with #2 and #3 (once again they decline to cover FAIR and its cousin TORO) instead claiming #2 Mobius MMIT to be the "best" IT pick, despite it having a laughable 0.9% yield and lower 1 year and 3 year (a higher 5 year return but not once you factor in dividends)
https://www.investorschronicle.co.uk/alpha/2023/09/14/don-t-be-the-dumb-money-for-investment-trusts/
Interestingly FAIR was also #1 in August and they did actually cover it to the extent they said:
https://www.investorschronicle.co.uk/alpha/2023/08/03/scottish-mortgage-and-the-fair-price-of-risk/
"The top 10 table includes trusts like Fair Oaks Income (FAIR), which has shares priced in dollars and is a play on the income generated by collateralised loan obligations (CLOs) made up of debt of US and European companies. These are
complex financing arrangements and the products are hard to understand. Of course, debt isn’t bad, but this is the sort of investment that requires an understanding of the credit profile of borrowers (and indeed lenders), how the
loans are originated, the structure and seniority of debt, whether loans are fixed rate or floating, the terms until they are due etc. On top of that, you’d need to understand the structure of the debt package and the seniority of the tranche of the debt product you have exposure to. In short, it’s just way too much for a retail investor to keep on top of."
That was analysis worth paying for, don't you think?
Have a good weekend.
Hi Damofarl,
These are both worth a read. A perspective which is positive for FAIR, and written 8 months ago where arguably you could say here in month 9 the outcome is broadly accurate.
https://www.cqs.com/file.axd?pointerid=63d7e5cc4b53d7117cfc9270
https://www.cqs.com/file.axd?pointerid=63c158784b53d70f8cee534a